Sweta Estates Pvt. Ltd. And Ors. vs Director, Town And Country ... on 18 July, 2003

Equivalent citations: (2004) 136 PLR 238

Author: G Singhvi

Bench: G Singhvi, N Sud

JUDGMENT
G.S. Singhvi, J.

1. In this petition, the petitioners have prayed for issuance of a mandamus to the respondents to commence, carry out and complete external development works in relation to their Group Housing Colony at Village Tikri, Tehsil and District Gurgaon within a specified time-frame and to restrain respondent No. 1 from charging interest and penal interest on account of delayed/non-payment of instalments' of External Development Charges (for short, 'EDC'). They have further prayed for directing the respondents to reschedule the payment of EDC, to renew the licenses of their Group Housing Colony and to release the building plan without demanding further payment on account of EDC.

2. For deciding the issues raised in the petition, it is appropriate to notice the relevant facts.

Petitioner No. 1-M/s Sweta Estates Pvt. Ltd. owns 12.557 acres land situated in Village Tirki, District Gurgaon. In September, 1994, it submitted an application to Director Town and Country Planning, Haryana (respondent No. 1) for grant of licence under Section 3 of the Haryana Development Regulation of Urban Areas Act, 1975 (for short, 'the 1975 Act') for setting up of a Group Housing Residential Colony on the said land. After scrutiny of the application, respondent No.1 sent letter dated 23.12.1994 (An-nexure P1) to petitioner No. l requiring it to furnish a bank guarantee equal to 25% of the estimated cost of internal and external development works, to execute LC-IV and Bilateral Agreements and furnish an undertaking that portion of sector/master plan roads which will form part of the licensed area will be transferred to the government free of cost in accordance with Section 3(3)(a)(iii) of the 1975 Act. Petitioner No. 1 executed the required agreements (Annexures P4 and P5) and also furnished the undertaking in terms of Annexure P1. Thereafter, respondent No. 1 issued licence No. 2 of 1995 (An-nexure P6) in favour of petitioner No. 1 for setting up Group Housing Colony.

3. For the sake of convenient reference, Clauses (i) and (k) of the Bilateral agreement and Clauses (e)(i) to (iv), (vi), (ix) and (g) of LC-IV agreement are reproduced below:

"Clauses (i) and (k) of the bilateral agreement

(i) That the owner shall deposit 30% of the amount to be realised by him from flat-holders from time to time within ten days of its realisation in a separate account to be maintained in a scheduled Bank and this amount shall be utilised by the owner towards meeting the cost of internal development works and construction works in the colony.

(k) That the owner shall deposit service charges at the rate of Rs. 1/- per sq. meter of the total flatted area of the colony (excluding institutional areas like school, parks, etc.) in two equal instalments. The first instalment of the service charges would be deposited by the owner within sixty days of the issue of the Licence and the 2nd instalment to be deposited within six months from the date of grant of licence.

Clauses (e)(i) to (iv), (vi), (ix) and (g) of LC-IV agreement

(e) That the owner/colonizer undertakes to pay proportionate External development Charges for Group Housing Scheme as per rate, schedule, terms and conditions hereto:

(i) That the Owner/Colonizer shall pay the External Development Charges @ Rs. 30.25 lacs per gross Acre for Group Housing Colony. These charges shall be payable to Haryana Urban Development Authority through the Director, Town and Country Planning, Haryana either in lump sum within 30 days from the date of grant of Licence or in right equal six monthly instalments of 12.5% each, i.e.

(a) First instalment of 12.5% of the amount of External Development Charges shall be payable within a period of 30 days from the date of grant of licence.

(b) Balance i.e. 87.5% in seven equal six monthly instalments along with interest at the rate of 18% per annum, which shall be charged on unpaid portion of the amount worked out at the tentative rate of Rs. 30.25 lacs per gross Acre for Group Housing Colony.

(ii) In case the Colonizer seeks for a completion certificate before the payment of EDC, they would have to first deposit the entire balance of EDC and only thereafter the grant of completion certificate would be considered.

(iii) The unpaid amount of EDC would carry an interest of 18% per annum and in case of any delay in the payment of instalments on the due date an additional penal interest of 3% per annum (making the total payable interest 21% per annum) would be chargeable upto a period of three months and an additional three months with the permission of DTCP.

(iv) In case the HUDA executing External Development works completes the same before the due date and consequently requires charges for the same, the DTCP shall be empowered to call upon the colonizer to pay the EDC even before the completion of four year period and the colonizer shall be bound to do so.

(v) xx xx xx

(vi) The colonizer will arrange the electric connection from outside source for electrification of their colony from HSEB. If they fail to provide electric connection from HSEB, the Director, Town and Country Planning will recover the cost from the coloniser and deposit it with HSEB.

(vii) to (viii) xx xx xx

(ix) That the owner/colonizer undertakes to pay proportionate External development Charges for Group Housing Scheme as per rate, schedule, terms and conditions annex hereto.

That the rates, schedule and terms and conditions of External Development Charges may be revised by the Director during the period of licence, as and when necessary and the owner shall be bound to pay the balance of enhanced charges, if any, in accordance with the rates, schedules and terms and conditions so determined by the Director.

(g) That the Owner shall deposit service charges at the rate of Rs. 1/- (one) per square meter of the total flatted area of the colony in two equal instalments. The first instalments of the service charges would be deposited by the owner within sixty days from the date of grant of licence and the second instalment to be deposited within six months from the date of grant of licence."

4. As required by the provisions of the 1975 Act read with the Haryana Development and Regulation of Urban Areas Rules, 1976 (for short, 'the Rules') and the two agreements executed by it, petitioner No. 1 sent first instalment of EDC along with inter-est at the rate of 12.5% (Rs. 47,48,116/-) in the form of a demand draft. However, service charges payable in terms of Clause (g) of LC-IV agreement were remitted only after respondent No. 1 had sent letter dated 8.5.1995 reminding it to do so. The second instalment of EDC together with interest (total Rs. 77,39,429/-) was sent by petitioner No. 1 vide demand draft dated 6.10.1995. The second and final instalments of service charges was also sent vide demand draft dated 6.10.1995.

5. In the meanwhile, the petitioners purchased 28.17 acres of land at village Tikri as a consortium with separate identified shares and submitted a fresh application for grant of licences for setting up a Group Housing Colony on a total area measuring 40.72 acres. Vide letter dated 13.3.1996 (Annexure P22), respondent No. 1 asked the petitioners to execute LC-IV and Bilateral Agreements, furnish bank guarantee and submit undertaking to transfer the land covered by sector roads and master plan roads. He issued another letter dated 5.4.1996 (Annexure P23) to the petitioners for execution of similar agreements etc. with reference to their application for grant of licence in respect of additional land measuring 1-1/2 acres. All the petitioners did the needful. Thereafter, respondent No. 1 issued licence Nos. 35, 36 and 37.

6. After receiving licence Nos.35, 36 and 37, the petitioners paid some instalments of EDC. They also paid service charges. The particulars of instalments of EDC and service charges paid in respect of licence No. 2 are as under:

7. In the intervening period,the petitioners submitted zoning plan which was duly approved by respondent No. 1. They also submitted applications and made representation for sanction of building plan, renewal of licence and release of proportionate bank guarantee. On his part, respondent No. 1, issued several letters and notices to the petitioners pointing out deficiencies in their applications and building plan and short payment of instalments of EDC, interest and penal interest. In response to some of the communications/notices issued by respondent No. 1, the petitioners deposited additional amount to make good the shortfall in the instalments of EDC and interest/penal interest on account of delay in the deposit of the amount.

8. We do not want to burden this order by giving details of various letters exchanged between the parties on various issues and applications made by the petitioners, but reference to some of the communications/notices exchanged between the parties would be apposite.

i) Vide notices dated 3.6.1997 (Annexure P45) and 14.7.1997 (Annexure P51) respondent No. 1 called upon petitioner No. 1 tp show cause against proposed cancellation of licence No. 2 on account of violation of the terms of LC-IV/Bilateral Agreements and the provisions of Rules.

ii) Vide order dated 22.1.1998 (Annexure P57), respondent No. 1 condoned the delay of 5 montns in submitting the application for renewal of licence No. 2 of 1995 subject to the condition of the naying 21% interest on the delay payment of renewal licence fee and taking of steps to get the project going at the earliest.

iii) Respondent No. 1 issued another notice Annexure P83 dated 12.5.2000 to petitioner No. 1 proposing cancellation of licence on the ground of violation of LC-IV agreement and the provisions of the Rules by not deposing 4th to 8th instalments of EDC on due dates, no-commencement of the development works in the colony and non-revalidation of the bank guarantee dated 26.6,1998. In its reply dated 2.6.2000 (Annexure P84), petitioner No. 1 blamed respondent No. 1 for delay in the sanction of building plan and renewal of licence. Thereafter, its representative submitted an undertaking dated 12.10.2000 (Annexure P 88) to pay the balance amount on account of enhance rate of EDC and surcharge or any other amount which may become payable at a later stage.

iv) vide letter dated 1.2.2002, respondent No. 1 informed petitioner No. 1 that although the building plans have been found technically in order the same will be released only after the payment of EDC and renewal of licence. Petitioner No. 1 responded to that letter by accusing respondent No. 1 of delaying the completion of the project.

v) On 26.2,2002, petitioner No. 1 submitted representation Annexure P. 102 for renewal of licence, release of building plan etc. In reply, respondent No. 1 sent letter Annexure P103 dated 25.3.2002 intimating petitioner No. 1 that its demand for renewal of licence Nos. 35 to 37 will be considered only after deposit of 4th to 8th instalments of EDC in respect of those licences. Petitioner No. 1 then sent letter dated 11.4.2002 asserting that delay in the deposit of EDC was on account of the failure of the department to undertake external development work, like laying of roads, street lighting, sewerage, storm water drainage etc.

9. In the writ petition, it has been averred that failure of the respondents to undertake the external development work, like construction of roads, laying of sewerage, providing of water channel and sanction of building plan and renewal of licences has resulted in depriving them of their legitimate right to set up the Group Housing Colony. According to the petitioners the respondents are duty-bound to undertake external development works in accordance with the provisions of the 1975 Act and the Rules and the conditions of LC-IV and Bilateral Agreements and they cannot insist on deposit of the entire amount of EDC without providing basic facilities necessary for setting up Group Housing Colony.

10. In the written statement filed on behalf of respondent No. 1, it has been averred that demand of EDC and interest/penal interest has been made strictly in accordance with the provisions of the 1975 Act and the Rules, LC-IV and Bilateral Agreements and the petitioners cannot wriggle out of their obligation to pay the EDC at the prescribed rate along with interest and also pay penal interest for delay in the deposit of the instalments of EDC. On the issue of external development, respondent No. 1 has averred that the provisions of external services is required only after the coloniser has completed the internal services and obtained occupation certificate for the colony and in the present case, no step whatsoever has been taken by the petitioners for internal development and they are trying to avoid their obligation to deposit EDC on the pretext of non sanction of building plan and non-renewal of licences. According to respondent No. 1 the petitioners have deliberately delayed the deposit of EDC on due dates and are trying to shift the blame on the HUDA authorities for not undertaking external development.

11. In a separate written statement filed on behalf of respondent No. 2, it has been averred that substantial external development works, like master water supply, master sewerage, storm water drainage, master roads, master street lights, master horticulture works, community building etc. have already been executed and these development works will benefit the inhabitants of the Group Housing Colony of the petitioners and other inhabitants of the area. According to respondent No. 2, the external development works are to be commensurate with the pace of the development activities in the area and recovery of EDC from colonisers. The stand taken by respondent No. 2 is reflected in the preliminary submissions and the following extracts of para 2 of its written statement:

"Preliminary submissions

1. That Haryana Urban Development Authority is the main agency to execute the external development works in the Urban Estate of Haryana State. The answering respondent has already executed the external development works. The work of the master water supply, master sewerage, storm water drainage, master roads, master street light, master horticulture works, community buildings etc. has already been executed. All the development works in the area will benefit the inhabitants of the above colony as and when the inhabitation takes place. It is incorrect to say that no external development works have been carried out in the area. The external development work has already been carried out and are still being carried out as development work in an ongoing process. The developed infrastructure, like Gurgaon water supply channel, water treatment plant, sewage treatment plant, road, network, street light, various community buildings is the part of external development work and expenditure had been incurred by HUDA on those. The external development works are to be commensurate with the pace of the development activities in the area.

Extract of para 2
It is submitted that Haryana Urban Development Authority is the main agency to execute the external development works in the Urban Estate of the Haryana State. The said agency is to execute the external development works in the Urban Estate in Gurgaon also. Development of town is a continuous process and has to match with the habitation of the area. Providing of external development services is also commensurate with the recovery of fees for external development works for the colonisers. In the event of default of payment by even one coloniser, providing of external development services to the entire town suffers. Haryana Urban Development Authority is the executing agency to develop the towns as a whole and the external development services cannot be provided for a particular colony individually. It is not possible to provide the entire external service in one go in the entire urbanisable area of more than 20000 acres. The provisions are made in an incremental manner, so as to cater to the maximum inhabitant zones on priority. The development of colony is the responsibility of the coloniser. The amount collected against the EDC from the colonisers goes into the fund meant for the provision of external development works in the urbanisable area. It is not necessary that the entire amount collected from the coloniser vide EDC is dedicated to provide services exclusively to that colony. EDC is the contribution towards the cost of development works carried out/to be carried out for the development of the city as a whole, the city being unit for the purpose of calculation. Out of the EDC, collected from various colonisers/plot holders, the following development works have already taken place in Gurgaon:

A master Water Supply

1. GWS channel of 60 Km. length with capacity of 135 causes at Bahadurgarh and 100 causes at Gurgaon has been constructed.

2. Water treatment plant of 20 MGD capacity (PHOI) near village Bansal has been completed and made functional. Work of 2nd phase of 20 MGD is in progress.

3. 75.20 km. of distribution main/rising main (Master Water/Supply) of various sizes have been laid.

4. 2 Nos. storage and sedimentation tanks and 2 Nos. CWT at main water works completed.

5. One intermediate boosting station in Sector 16 completed. Total expenditure on GWS channel, land cost and maintenance of CWS channel, master water supply distribution mains for water treatment plant etc. has been incurred approx. 102.63 crores.

B. Master Sewerage

1. 78.00km. of various sewer lines of various sizes along sector dividing roads have been laid.

2. Sewerage treatment plant of 15-MGD capacity has been completed and commissioned.

3. Temporary sewerage pumping system/disposal works in Sector 4 is functional. Total expenditure on master sewerage including land, works and maintenance work have been incurred to Rs. 30.76 crores.

C. Storm Water Drainage
The provision for storm water drainage has been completed as below:

(ii) Old NH-8 from Durdahera border to South City Chowk and Atul Kataria Chowk to Mahavir Chowk and from Mahavir Chowk to MD1 Chowk is under progress and for its widening and strengthening into double carriage way of 2x10 mtr./2x7 mtr.

(iii) The widening of PWD, B&R roads such a Jharsa roads from Sharma Restaurant to Jharsa village is partially completed up to NH-8 (Bye-pass) and further it is being undertaken.

(iv) Khandsa road old Gurgaon-Manesar road have also been widened and strengthened.

(v) Sohna road have also been strenghtened along HUDA sectors,

(vi) some other HUDA roads have also been strengthened/being strengthened in phases as per the requirement/condition of the roads for giving good riding surface for smooth flow of traffic with the pace of development/inhabitation.

F. Master street Light
Then HPSV street lighting on steel tubular poles with underground cables on 73 Km. of master roads have been completed and are functional. Total expenditure on installation/maintenance work of energy charges have been incurred 7.78 crores.

G. Master Horticulture Works
In horticulture works on road side plantations green belts, grill fencing barbed wire fencing, shallow tube-wells for a watering for plants in green belts and maintenance work the expenditure of Rs. 11.91 crores have been incurred.

H. Community Buildings
The following community buildings have been constructed/under construction by HUDA against EDC:

i)
Colleges:

1 No.

under
construction in Sector 9.

ii)
Hospital:

1 No.

hospital
100 bedded in Phase 1 is being undertaken in the current year 2002-2003.

constructed
in colonizer area (i.e. one each in Palam Vihar, DLF and Sushant Lok). under
construction.

2 Nos.

ix) Nursery
School
12 Nos.
are
under construction (against provisions of Primary School).

x) High School:

2 Nos.

under construction (one Sushant Lok and2nd in South City).

1 No.

in
Sector 40 Gurgaon (converted into Law College).

xi)
Dispensary:

1 No.

constructed
in Sector 4, Gurgaon.

1 No.

under
construction (Sushant Lok).

xii)
Health Centre:

Estimate
for one No. Health Centre in colonizer area is approved.

xiii) Club:

One
club
constructed in Sector 29 Gurgaon one is under construction in Sector 4

xiv) Police Station :

3 Nos.

constructed
(One in Sector 15-II, Sector 38 & Sector 29).

1 No.

in
Sector 56 under construction.

1 No.

in
Sector 5 (estimate processed).

xv) Police Posts:

6 Nos.

completed
(1 No. in Palam Vihar, 4 in DLJ and 1 in Sushant Lok).

xvi)
Fire Station: Bigger
1 No.
constructed
in Sector 29, Gurgaon.

xvii) Children Park
1 No.
constructed
in Sector 22, Gurgaon.

From the above mentioned facts, it is clear that the basic facilities required for constructing/buildings are present at the site. However, it seems that the petitioners themselves are not interested in starting the construction etc. All the development works mentioned above will benefit the inhabitants of the above colony as and when the inhabitation takes place and as such it is not correct to say that no external development works have been carried out. In additional external development works are to be commensurate with pace of development activities in the area. As mentioned in the writ petition, the renewal of licence of petitioners (Group Housing Colony) are pending and as such no development activities by the colonizer have been done.

a. Approach Road: As far as this colony is colony, approach from Sohna road is available and this is the main approach road for tne colony. The work for construction of 60 mtr. wide road stands allotted and is likely to start soon. Access to be taken from Gurgaon-Sohna road is further clear as per condition No. 4 of the licence which clearly states that M/s Sweta Estates Pvt. Ltd. will have to take permission from the Director, Town and Country Planning Department for taking access from Gurgaon-Sohana road.

b. Electrical connection: As per condition No. 6 of bilateral agreement, the colonizer will have to arrange electrical connection from outside source for electrification of their colony from HSEB (Now.HVPN) and as such this is the responsibility of colonizers but not of the answering respondent.

c) Disposal: As per condition (K) of page 11 of bilateral agreement, the owner/colonizers shall give the requisite land for treatment works and for broad irrigation purposes at his own costs till the completion of external sewerage system by HUDA and make their own arrangement for temporary disposal. In this case, since no construction so far taken place, there is no sewage generated and as such no disposal is so far needed. However, no demand for the sewerage system has been raised by the colonizer as the sewerage connection is required only after occupying the constructed buildings.

d) Water lines also existed on Sohna road and on demand water can be arranged for the colony. Although initial arrangements are to be made by the colonizers themselves, as and when the petitioners apply for water connection, the water connection can be sanctioned for supplying canal based water as per the rules. It has also been made clear to the colonizers that the colonizers will be fully reasonable to meet the demand of water supply and allied services till such time these are made available by the State Govt. HUDA. All link connections with the State Govt/HUDA system and services will be done by the colonizer. If necessary extra tube wells shall also be installed to meet the extra demand of water beyond the provision made in the estimate. The final development plan for the controlled area I to IV is annexed herewith as Annexure R1."

12. In their replication to the written statement of respondent No. 1, the petitioners have averred that even though the respondents have received 12.37 acres towards EDC, no perceptible external development has been carried out and they want to earn interest on the said amount by delaying the sanction of building plan and completion of the external development. They have further averred that in the absence of any external development, it is impossible to carry out any internal development. According to the petitioners, the respondents have failed to point out the basis of the rate of external development, i.e., Rs. 33.28/36.60 lacs per acre and yet they are insisting on payment of the additional sums and that too without providing basic facilities for construction of Group Housing Colony. They have also reiterated the accusation that respondent No. 1 has unnecessarily delayed the release of sanctioned building plan and thereby frustrated any attempt to commence the real work for setting up of the colony.

13. In a separate replication to the written statement of respondent No. 2 the petitioners have averred that the particulars of the so-called development given in the written statement are ambiguous and misleading because the said development relates to the entire city of Gurgaon and no discernible external development has been carried out on the periphery of the land where Group Housing Colony is to be set up. In paragraph 2 of the replication, the petitioners have tried to counter the assertion contained in the written statement of respondent No. 2 regarding external development by making the following assertions:

"i) There are basically three roads, which would provide access to the colony. The first road is the Gurgaon-Sohna Road, which has been in existence decades before the petitioners even applied for the grant of a licence, to develop their land into a group Housing Colony. This road is a sanctioned 60 Mtrs. wide road and is a State Highway. Prior to 1998, this road was metalled only to the extent of 20' in width. On account of urbanisation in the area, the then Deputy Commissioner, Gurgaon had requested the colonizers in the area including the petitioners to widen this road to some extent at the cost of the colonisers. It is, therefore, that several colonizers pooled in their resources and widened the metalling of this road 6' either side and currently', the width of the road is only 32', i.e., approximately 10 Mtrs. This road has to be widened to 60 Mtrs. by HUDA which has not been done and no work at site has been carried out. In all fairness, the respondents should have indicated this fact, but have purposely withheld this fact from this Hon'ble Court. The colony of the petitioners is located in Sector 48, Gurgaon and is located on a sector dividing road between Sector 48 and 33. The Respondents have admitted that this 60 Mtrs. sector dividing road has not yet been laid and that the work is likely to commence in future. This admission of the respondents clearly establishes the averments made by the petitioners that the respondents have not carried out any external development works in relation to the colony of the petitioners. There is yet another road, which is to connect the colony of the petitioners comes from Faridabad side and is on the periphery of the city going in front of Sushan Lok, Phase-II, III, Unitech, South City, Rosewood and then turning north-east to the Group Housing colony of the petitioners. This road has not been laid and even the land on which the road is to be laid, has not. been acquired. Thus, except for the existing Gurgaon-Sohna Road upon which the respondents have not carried out any road widening, there is no access provided by the respondents to the land of the petitioners.

(ii) Coming to the Master sewerage, the same has been indicated in red/black colour in straight line. A perusal of the plan, annexed with the written statement, would clearly indicate that there is no Master Sewerage laid in front of the colony and the closest Sewerage Line is at a point connecting Sectors 38 and 33. It is pertinent to mention that the dotted red/black line indicating the sewerage already laid, is in front of Sector 38, which is a HUDA Sector. In order to promote their own Sector, the sewerage pipes have been laid up to the indicated point, but significantly, this sewerage system does not have any outlet or any connection at any point and no system for disposal. Only the pipes are laid, without the same being functional. Otherwise, in front of the colony of the petitioners, there is no sewerage line, as admitted by the respondents themselves, thereby substantiating the averments made by the petitioners that there is no external development regarding sewerage as well.

(iii) That the Master Water Supply has been indicated in green/black colour in the straight line. This water supply line to be laid by HUDA does not exist at the site and is yet to be laid. The violet/black dotted line is a small water pipeline, which was laid long time back by the Public Health Department, to cater to the needs of the villagers and this is not the supply line in so far as supplying water to the colony of the petitioners is concerned. Thus, admittedly, there is no water supply to the colony of the petitioners, thereby substantiating the fact that no water supply arrangements have been made regrading the colony of the petitioners.

(iv) That in so far as the storm water drainage is concerned, the position had not been indicated, but it is identical viz-a-vis the Master Sewerage and the Water Supply. Storm water drainage does not at all exist in the periphery or in the immediate vicinity of the colony of the petitioners.

(v) The Respondents have not purposely indicated the position regarding electrification works. It is submitted that the Sector dividing roads as well as the Gurgaon-Sohna road after widening, have to be lit and for that purpose, necessary high voltage lines with poles and other infrastructure have to be installed at the roads. Since the roads only have not been laid, obviously the electricity lines and the poles have not been laid. Thus, there is no provision of even electricity supply to the colony of the petitioners."

14. Before proceedings further, we deem it proper to mention that at the conclusion of arguments on 28.5.2003, the learned Advocate General was asked to indicate the maximum time within which the basic facilities, like water channel, electricity, sewerage and roads will be provided to the colony of the petitioners. In response to the Court's query, Ms. Raminder Gadhoke, learned counsel for respondent No. 2 filed affidavit dated 29.5.2003 of Shri R.C. Taneja, Chief Engineer, HUDA. Paragraphs 2 to 6 that affidavit read as under:

"2. That as per approved zoning plan, main approach to the colony of the petitioner is to be taken from Gurgaon-Sohna Road, which is a State Highway and is sector dividing road of Sectors 38 and 48. This road already exists and as per condition No. 4 of the licence, M/s Sweta Estate Pvt. Ltd can take access from this road after seeking permission from Director, Town and Country Planning Haryana at any time. The deponent further submits that 2nd access from 60 Mtr. wide road coming from the sides of Sector 29 will also be provided within a period of 4 months from the date of submission of technical parameters by the petitioner.

3. That water supply lines exists on Gurgaon-Sohna road and water connection can be released to M/s Sweta Estates Pvt. Ltd. which has already been offered vide Executive Engineer, HUDA Division No. III, Gurgaon vide No. 6407 dated 23.4.2003. HUDA is supplying water to Public Health Deptt. in the city and these mutual arrangements for supplying water to colonizers on Sohna road including M/s Sweta Estates Pvt. Ltd. have been made with that Deptt. and thus, water supply can he provided immediately.

4. That 300 mm. i/d sewer line touching the area of M/s Sweta Estate Pvt. Ltd. has already been laid at site. This line can be used in case some sewerage is generated but invert level of the internal sewer of the colony, discharge, size and point of connection are not known. In case of any change, sewer will be provided within 4 months from the date whon above data is supplied by the colonizer/petitioner.

5. That the deponent undertakes that the storm water drain will be laid within 4 months from the date when the data relating to discharge of internal storm water of the colony, size and point of connection is supplied by the colonizer/petitioner.

6. That as per the condition No. 6 of the bilateral agreement the colonizer/petitioner is required to arrange electrical connection from outside source for electrification of their colony from HSEB (now HVPN)."

15. Shri R.K. Jain, learned Senior counsel appearing for the petitioners argued that his clients are under obligation to pay EDC and service charges in accordance with the provisions of the 1975 Act read with the Rules and the terms of LC-IV and Bilateral Agreements but the respondents cannot insist on payment of the total EDC without undertaking any perceptible external development. He submitted that the respondents are under a statutory obligation to undertake external development in relation to the area of group Housing Colony and provide the necessary facilities to enable the petitioners to undertake internal development and they cannot charge interest-penal interest on the instalments of EDC till the basic facilities are provided in the form of external development. Shri Jain referred to the provisions of the 1975 Act, the Rules and various clauses of the two agreements and submitted that the respondents should be directed to complete external development and they be restrained from insisting on payment of EDC and interest or penal interest on account of the alleged delay in the deposit of EDC. In support of this argument, Shri Jain relied on the judgments of this Court in Urban Improvement Co. (P) Ltd. and Anr. v. The State of Haryana and Ors., A.I.R. 1994 P&H 53, and Shanti Kunj. Investment (P) Ltd. v. U.T. Administration, Chandigarh and Ors., (2001-1)127 P.L.R. 838. He then argued that the respondents cannot charge compound interest because there is no provision in the 1975 Act, the Rules and the two agreements for charging of such interest. In support of this argument, Sh. Jain relied on the judgment of this Court in Smt. Kanta Devi Budhiraja v. State of Haryana and Ors., (2000-2)125 P.L.R. 698. Sh. Jain distinguished the judgment of Gulmohar Estates Limited and Ors. v. State of Haryana and Anr., (1997-2) 116 P.L.R. 547, by pointing out that in that case the Court had, as a matter of fact, found that external development had been completed by the concerned agency, i.e., HUDA.

16. Sh. Surya Kant, learned Advocate General referred to the provisions of Section 5 of the 1975 Act and the Rules and argued that the petitioners are duty bound to deposit EDC or. due dates and also pay penal interest for delayed payment of the instalments of EDC. He referred to Annexure P55 dated 7.11.1997 to show that the building plan was not sanctioned because there were 47 deficiencies in it. Sh. Surya Kant then submitted that concept of external development is not for an individual coloniser but is for the entire township and the petitioners cannot avoid the payment of outstanding amount of EDC, more so because they have not done anything in the direction of internal development of the colony. On the issue of levy of compound interest, Sh. Surya Kant submitted that the respondents are not charging such interest. In the end, he stated that building plan of the colony of the petitioners will be sanctioned and their licences will be renewed as soon as they deposit the remaining instalments of EDC and other dues.

17. Ms. Raminder Gadhoke, learned counsel for respondent No. 2 adopted the arguments of Sh. Surya Kant and submitted that the petitioners cannot seek a direction for release of building plan without paying instalments of EDC in respect of licence Nos. 35 to 37 because the group Housing Colony is being set up jointly by all the petitioners in pursuance of four licences. She submitted that respondent No. 2 has already carried out the necessary external developments and the remaining works would be carried out in terms of the undertaking contained in the affidavit of Sh. R.C. Taneja to the payment of EDC etc. by the petitioners.

18. We have given serious thought to the arguments of the learned counsel. Section 2(e), (g) and (i), 3(1), (3), (a)(ii), and (4) and 5 of the 1975 Act and Rules 11, 12, 13 and 14 of the Rules, which have bearing on the decision of this petition read as under:

(f) xx xx xx
2(g) external development works include sewerage, drainage, roads and electrical works which may have to be executed in the periphery of, or outside, a colony for the joint benefit of two or more colonies.

(h) xx xx xx
2(i) 'internal development works' mean-

(i) metalling of roads and paving of footpaths;

(ii) turfing and plantation with trees at open spaces;

(iii) street lights;

(iv) adequate and wholesome water supply;

(v) sewers and drains both for storm and sullage water and necessary provision for their treatment and disposal; and

(vi) any other work that the Director may think necessary in the interest of the proper development of a colony.

3. Application for licence.- (1) Any owner desiring to convert his land into a colony shall unless exempted under Section 9, make an application to the Director, for the grant of a licence to develop a colony in the prescribed from and pay for it such fee as may be prescribed. The application shall be accompanied by an income tax clearance certificate.

3(3) After the enquiry under Sub-section (2), the Director, by an order in writing, shall-

(a) grant a licence in the prescribed form, after the applicant has furnished to the Director a bank guarantee equal to twenty five per centum of the estimated cost of development works as certified by the Director and has undertaken-

(i) to enter into an agreement in the prescribed form for carrying out and completion of development works in accordance with the licence granted;

(ii) to pay appropriate development charges if the main lines of roads, drainage, sewerage, water supply and electricity are to be laid out and constructed by the Government or any other local authority. The proportion in which and the time within which such payment is to be made shall be determined by the Director.

xx xx xx
(4) The licence so granted shall be valid for a period of two years and will be renewable from time to time for a period of one year, on payment of prescribed fee.

xx xx.

5. Cost of development works.- (1) The coloniser shall deposit thirty per centum of the amount realised, from time to time, by him, from the plot holders within a period of 10 days of its realisation in a separate account to be maintained in a scheduled bank. This amount shall only be utilised by him towards meeting the cost of internal development works in the colony. After the internal development works of the colony have been completed to the satisfaction of the Director the cploniser shall be at liberty to withdraw the balance amount. The remaining seventy per centum of the said amount shall be deemed to have been retained by the coloniser, inter alia to meet the cost of land and external development works.

a) furnish to the Director a bank guarantee equal to twenty five per cent of the estimated cost of the development works as certified by the Director and enter into an agreement in form LC-IV for carrying out and completion of development works in accordance with the licence finally ordered;

b) undertake to deposit fifty per cent of the amount to be realised by him from the plot-holders, from time to time, within ten days of its realisation in a separate account to be maintained in a scheduled bank and this amount shall only be utilised towards meeting the cost of internal development works in the colony;

c) undertake to pay proportionate development charges, if the main lines of roads, drainage, sewerage, water supply and electricity are to be laid out and constructed by the government or any other local authority. The proportion in which and the item within which such payment is to be made shall be determined by the Director;

d) undertake responsibility for the maintenance and upkeep of all roads, open spaces, public parks and public health services for a period of five years from the date of issue of the completion certificate under Rule 16 unless earlier relieved of this responsibility and thereupon to transfer all such roads, open spaces, public parks and public health services free of cost to the Government or the local authority, as the case may be:

e) undertake to construct at his own cost or get constructed by any other institution or individual at its cost, schools, hospitals, community centres and other community buildings on the land set apart for this purpose, or undertake to transfer to the Government at any time, if so desired by the Government free of cost, the land set apart for schools, hospitals, community centres and community buildings, in which case the government shall be at liberty to transfer such land to any person or institution including a local authority on such terms and conditions as it may deed fit; and

f) undertake to permit the Director or any other officer authorised by him to inspect the execution of the layout and the development works in the colony and to carry out all directions issued by him for ensuring due compliance of the execution of the layout and development works in accordance with the licence granted.

(2) If the Director, having regard to the amenities which exist or are proposed to be provided in the locality, decides that it is not necessary or possible to provide such amenity or amenities, the applicant will be informed thereof and Clauses (c), (d) and (e) of Sub-rule (1) shall be deemed to have been modified to that extent.

12. Grant of licence (Section 3(3) and (4)].- (1) After the applicant has fulfilled all the conditions laid down in Rule 11 to the satisfaction of the Director, the Director shall grant the licence in form LC-V.

2) The licence granted under Sub-rule (1) shall be valid for a period of two years from the date of its grant during which period all development works in the colony shall be completed and certificate of completion obtained from the Director as provided in Rule 16.

13. Application for renewal of licence [Section 3(4)].- In case a coloniser fails to complete the development works within the period specified in Sub-section (2) of Rule 12 for the reasons beyond his control, he may apply to the Director for the renewal of licence in form LC-VI at least thirty days before the expiry of the licence and the said application shall be accompanied by:-

i) a demand draft for a sum calculated at a rate of ten per cent of the fee prescribed in Rule 3 for the issue of the licence, in favour of the Director as renewal of licence fee and drawn on scheduled bank;

ii) income tax clearance certificate;

iii) an explanatory note indicating the details of development works which have been completed or are in progress or are yet to be undertaken;

iv) reasons for non-completion of development works as required in terms of the licence granted to him; and

v) the licence.

14. Renewal of licence [Section 3(4)-(1).- On receipt of an application under Rule 13, the Director shall if satisfied after making such enquiries as he may consider necessary, that the delay in execution of development works, was for reasons beyond the control of the coloniser, renew the licence for a period of one year.

(2) In case the Director is not so satisfied, he shall reject the application and in that case an intimation in this regard will be sent to the coloniser in form LC-VII.

Provided that before rejecting the application, the Director shall give the coloniser an opportunity of being heard."

19. A conjoint reading of the statutory provisions reproduced above together with the format of LC-1V agreement required to be executed by the person who wants to set up a colony shows that the coloniser is required to pay the cost of external development works if the same are required to be carried out by the government or local authority. The Director has the power to determine the proportion and the time within the payment of EDC is to be made. The expression 'external development works' as defined in Section 2(g) includes sewerage, drainage, roads and electrical works which may have to be executed in the periphery of or outside the colony for the joint benefit of two or more colonies. This, however, does not mean that such works are confined to one or more colonisers. In its very concept, the external development is meant for the community at large and is not confined to a person who may develop a colony for the benefit of a group of individuals, i.e. plot holders. All those including the coloniser who are benefited by external development works are required to pay for it. Of course, the government has the discretion to grant exemption to economically weaker sections and similar other groups. The use of the words 'in the periphery' or 'or outside' in the definition of the expression 'external development works' is a clear indication of the intention of the Legislature not to confine the external development works to the particular colony. If the Legislature wanted to confine the external development works to the particular colony or colonies, then the definition of the said expression would have been differently worded. The reason why the external development works are not confined to the particular colony or colonies is not far to seek. The works, like laying of roads, sewerage, drainage and electrical lines involve huge expenditure. If these works are to be confined to few individuals who may purchase the land for setting up a colony, then such person and ultimately the plot/flat owners would be burdened with exorbitant cost and the very object of urbanization of the area of involving private entrepreneurs, i.e., colonisers would be frustrated. So far as the coloniser is concerned, he can realise this amount from the plot holders in advance. Even if he/it pays for the external development works from his/its own resources, then the cost of external development works can be realised from those who are allotted plots after completion of the colony. However, there is nothing in the scheme of the 1975 Act, the Rules and the format of LC-IV agreement from which it can be inferred that the coloniser can avoid the payment of EDC on due dates on the pretext of non-section of building plan or non-renewal of licence or the failure of the competent authority to provide particular facility which forms part of the external development work.

20. In the light of the above analysis of the relevant provisions, we shall now consider whether the petitioners are justified in not paying the balance instalments of EDC and other charges on the pretext of alleged non-execution of external development works by respondent No. 2 or non-renewal of licenses and non-release of building plan. A careful reading of various sub-clauses of the two agreements executed by them shows that the petitioners had undertaken to pay EDC at the rate of 30.25 lacs per gross acre of the HUDA through respondent No. 1. They had the option of paying the entire amount in lump sum within 30 days from the date of grant of licence or in eight equal six monthly instalments of 12.5% and also pay interest at the rate of 18% on unpaid portion of the amount. In term, of Clause (e) (iii), they were required to pay penal interest at the rate of 3% for delayed payment of instalments. They had also undertaken to take electric connection from the Haryana State Electricity Board. These payments were not subject to the completion of particular external development as per the terms of agreement. The provision for payment of EDC in eight equal six monthly instalments is indicative of the fact that external development works were to be completed within a period of 4 years. The payment of instalments of EDC were not subject to the completion of particular item of external development work at a particular point of time. However, the fact of the matter is that after paying first two instalments in respect of licence No. 2, the petitioners have regularly delayed the payment of EDC and entered into a maze of correspondence blaming the respondents for delaying the project. Of course, in various communications, they admitted delay on their part in depositing the instalments of EDC etc and projected the financial stringencies as the reasons for non-payment of instalments of the EDC etc. and also under look to pay the amount with interest.

21. A careful reading of the pleadings of the parties and documents filed by them including the maps of the site in question and the area shows that respondent No. 2 has undertaken the work of laying the roads, water channels, sewer lines and storm water drain. Most of the works are on the periphery of the site where the petitioners propose to set up the colony. The affidavit of Sh. R.C. Taneja shows that approach road is available to the petitioners from Gurgaon-Sohna road State Highway. According to Sh. Taneja, the second access road can be provided within 4 months from the date of submission of technical parameters by the petitioners. The water channel has already been laid by the Public Health Department and the same can be made available to the colony of the petitioners at any time. Likewise, the sewer lines can be provided within 4 months. As per the affidavit of Sh. Taneja, storm water drain will be laid within 4 months. In so far as electricity is concerned the petitioners have to obtain connection from Haryana Vidyut Parsaran Nigam Ltd. Thus, the petitioners assertion that no external development work has been undertaken by MUDA in relation to their colony cannot but be termed as per se erroneous. The hollowness of the grievance made by the petitioners is exposed by the fact that the last 8 years, they have not made any internal development at the site.

22. We have also gone through the maps provided by the learned counsel for the respondents and are satisfied that external development works have been carried out by HUDA in the area adjacent to the site of the colony of the petitioners and necessary facilities can be made available to them within the period indicated in the affidavit of Sh. R.C. Taneja. It, however, appears that needful could not be done because the petitioners have failed to pay 2nd, 4th and 8th instalments of EDC in respect of licence Nos. 35, 36 and 37 and other dues.

23. In so far as the levy of compound interest is concerned, it is sufficient to observe that the respondents cannot charge the same because there is no provision in the 1975 Act and the Rules or LC-IV and Bilateral Agreements executed by the petitioners for payment of such interest. In Kanta Devi Bhudhiraja v. State of Haryana (supra), this Court upheld the charging of interest at the rate of 18% on the delayed payment of instalments but quashed the levy of compound interest by observing that there is no provision in the Haryana Urban Development Authority Act, 1977 or the Regulations framed thereunder authorising HUDA to realise compound interest. In view of that decision and also in view of the statement made by the learned Advocate General, we hold that the respondents cannot charge compound interest from the petitioners.

24. In view of the above discussion, we do not consider it necessary to deal with various decisions relied upon by the learned counsel for the parties. However, it is apposite to mention that the judgment of the Division Bench in Shanti Kunj Investment (P) Ltd. v. U.T. Administration (supra) was considered and distinguished in C.W.P. No. 13695 of 2001 D.L.G. Builders Pvt. Ltd. v. Adviser to the Administrator, Chandigarh and Ors. decided on 13.2.2002, and 2002(3) R.C.R. (Civil) 101 (P&H):CWP No. 4936 of 2001 Haryana Builders Ltd., Gurgaon v. Haryana Urban Development Authority and Ors., decided on 8.3.2002. In D.L.G. Builders Pvt. Ltd. v. Adviser to the Administrator, Chandigarh and Ors. (supra), the Court examined the scheme of the Capital of Punjab (Development and Regulation) Act, 1974 and after making reference to the various decisions including the judgments of Shanti Kunj Investment (P) Ltd. v. U.T. Administration (supra) held as under:

"In our opinion, the judgment in M/s Shanti Kunj Investment (P) Ltd. 's case (supra) has to be read in the light of the peculiar facts brought before the Court and the same cannot be read as lying down the proposition that the allottee is not required to pay the instalments of premium with interest and ground rent in accordance with the terms and conditions of allotment and Rule 12 of the Rules till each and every amenity enumerated in Section 2(a) is made available at the site. The obligation of the Administration to provide approach road, water supply, electricity, sewerage, storm water drainage can be read as implicit in the scheme of the Act and the Rules, but it cannot be said that the allottee is entitled to withhold the payment of instalments on the ground of lack of particular amenity at the site. If the basic amenities like water electricity and approach road are not available at the site and on that account, it is not possible to construct the buildings, the allottee can represent to the Administration that he may not be burdened with the liability of ground rent and may not be penalised for non-construction within the specified time. After completion of building, he can represent for waiver of ground rent in case facility of sewerage has not been provided. However, after taking possession of the site and constructing the building, he cannot avoid his obligation to pay the balance of the premium alongwith interest and ground rent in accordance with the conditions of allotment and the provisions of Rule 12 of the Rules on the pretext that land-scaping has not been done or pavement has not been tiled (as averred in the present case) or the particular public utility service has not been provided. In our considered view, the allottee is bound to pay the balance premium and other charges in accordance with the conditions of allotment. If the judgment of M/s Shanti Kunj Investment Pvt. Ltd. (supra) is read as laying down a proposition that the allottee is not obliged to pay the balance of premium even after raising construction of the building and occupying it on the pretext that beautification of the site has not been done or land-scaping has not been provided or pavement of the tiles has not been done, extremely anomalous consequences would follow in as much as, the allottee would construct building and utilise the same by renting out or otherwise and thereby reap huge benefits, but would not pay a single penny towards balance of premium and ground rent etc. Therefore, while examining the compliant of the allottee about the lack of amenities, what the court is required to consider is whether the basic amenities, like water, electricity, approach road, sewerage and drainage have been provided in the area so as to facilitate construction of the building within the specified time. If such amenities have been provided, the Court will not interdict in the matter and facilitate withholding of the balance of premium, ground rent etc. Rather, it would insist that all the dues of public money are paid by the allottee in accordance with the relevant rules/regulations and conditions of allotment."

25. As a result of the above discussion, we hold that the petitioners are not entitled tc any relief in terms of the prayer made and the writ petition is liable to be dismissed. However, in view the affidavit of Sh. R.C. Taneja, we deem it proper to give an opportunity to the petitioners to pay the balance instalments of EDC and at the same time direct respondent No. 2 to complete the development works in terms of that affidavit.

Hence, the writ petition is disposed of in the following terms:

i) The petitioner, prayer for restraining the respondents from making recovery of EDC with interest specified in agreement LC-IV is rejected. However, they are allowed two months time to deposit the balance instalments of EDC with interest.

ii) Within two months of the deposit of arrears of EDC with interest in terms of LC-IV agreement respondent No. 2 should carry out/undertake development in terms of paragraphs 2 to 5 of affidavit dated 29.5.2003 of Sh. R.C. Taneja, Chief Engineer, HUDA.

iii) The respondents shall not charge penal interest from the petitioners till the completion of development works in terms of the affidavit of Sh. R.C. Taneja.

iv) The respondents are also restrained from charging compound interest on the delayed payment of EDC. If they have already realised the compound interest, then the petitioners shall be entitled to refund of the same.